TRAINING: Ongoing Legal Updates

Check out CAR for more info:  http://www.car.org/zipform/standard-forms/new-forms-and-revisions/

2018 Updates

DRE License Requirements

  • Name has been changed from BRE back to DRE
  • DRE does not care whether you use DRE, BRE, CalBRE so all versions work
  • Need to put personal license # on everything- even For Sale signs
  • Open House sign- can just have the name of the company but if it has your name, needs License #
  • Need to make sure signs are compliant- $200 fine, no warning is given. Oftentimes, agents are the ones reporting on each other
  • Regulation about social media posts will come out later this year so stay tuned! Make sure it is definitely on Facebook Page!
  • Nicknames are no longer violations anymore because you should always have DRE number
  • Broker Associates need to fill out RE 215 & mail to DRE

Marijuana

  • Recreational marijuana is now legal, need to have licenses to sell or transport- need a CA license & the local city license
  • Landlord can tell tenant to stop and say no to all of that
  • Prop 64- you can grow 6 plants inside (not visible from the street) if over 21, but landlord can still say no
  • You can now have 1 oz on your body over 21
  • According to Federal government it is still an illegal substance, but won’t go after Medical marijuana but Recreational is still unclear

Landlord/Tenant

  • Landlord cannot let tenants be a nuisance

Pets/Service Animals

  • Dogs get 1 free bite- once dog bites one time, landlord is now responsible because they know the tenant’s dog bites
  • Landlord cannot ask to remove service animals/companions
  • If someone has allergies to the pets, you need to give preference to the tenant who was there first but still should accommodate the tenant that needs to leave
  • You can change the rules for new tenants about pets, just need to tell them ahead of leasing it

Bed Bugs

  • Need to give every tenant the bed bug disclosure form, you cannot evict someone for bed bugs
  • Tenants can be held responsible for the costs of removing the bed bugs, current tenants also need to do this form
  • Landlords can ask Tenants to fix it. If they don’t pay it, then the landlord can evict them but cannot evict just because they have bed bugs. Need to give them a chance to fix it.

Water Meters

  • If Landlord is measuring how much tenant is using with a water bill & charging them for it, need to use the water meter form, do need to go back to past tenants

Flood Disclosure

  • Need to tell tenant if it is a flood zone, need to get NHD report that is only about floods so that landlords can give to the tenant each time you lease

Low-flow Plumbing Fixtures

  • Next year, every property type needs to have low flow, right now is just need certify that is done at sale

Agent Warnings

  • Do not give tax advice, every realtor does give legal advice, explaining the contracts is technically legal advice, stop at tax advice!
  • Don’t answer about vesting, capital gains, deduct things, you can give them a handout from CAR

New Tax Laws

BAD EFFECTS:

  • Now can only deduct interest up to $750k, but past loans are grandfathered in
  • Used to be able to deduct all taxes you pay, but now only up to $10k on first two properties, single or married
  • Home equity loan- can only deduct the interest for the money spent on fixing up the property, not for the funds you take out for other purposes

GOOD EFFECTS:

  • Tax rates are coming down for everyone
  • Standard deduction (doubled standard deduction $12,000 to $24,000)
  • Higher tax credit for kids (double tax credit & higher salary limit-$200k which is tripled)

HOA

  • When the HOA sends you a bill, they need to give you a breakdown of all the fees so you can now pick & choose which part of the HOA docs you want to get
  • You can install solar panels on the roof of a townhouse in which you are the only resident under that roof.

Swimming Pools

  • Need to put warnings about the pool in the MLS! Buyer almost died by the diving board breaking & sued the agent so make sure to disclose in the MLS about the pool
  • If the pool was installed or renovated after 1996, it must have one of three safety features
    • Fence, cover, or closure
    • Alarm on doors leading out to the pool
    • Self-closing and latching doors on all doors leading out to the pool
  • Check with your city ordinance, some cities have stricter rules
  • Brand new pools built in 2018 must have 2 safety features on them

Changes in Forms

3 New Forms

  1. Team Agreement- put the relationship in writing
  2. Property Images Agreement- photographer form (make the photographer sign this form- either give us ownership or they own it and let us use it forever)
  3. Amendment Form (AEA)- Addendum form has no time limit on it, this new form has a 3 day expiration period to respond, if you want to negotiate in writing, this is a better form to use to change the terms of the agreement, use Addendum before entering escrow, use Amendment within the escrow, escrow will still need to do their thing as well.

RLA was slightly changed

  • No more arbitration clause now (arbitration is confidential, cheaper, quicker) because before the listing agent could be subpeonaed into a buyer/seller arbitration and drag agent into it to write a check
  • Arbitration Addendum is now separate- can add it back in if you still want it

General Tips

  • Nanny cams/hidden camera surveillance/microphones in your house- be careful of what the agent says in the house-don’t say anything negative or do anything negative because can be sued by the seller, now the seller needs to give notice/sign that there is surveillance
  • Do not say bad things on social media about clients or other agents- have caused lawsuits on slander/libel
  • Disclosure- when you are doing AVID, always put a lot of detail but don’t use adjectives- don’t say what caused it, don’t diagnose, don’t be too specific on color/measurements. Not your job to figure out the problem, point out things that don’t look right

Dual Agency

  • If the other agent is in your office, you are both dual agents so you share the clients
  • Buyer’s agent- need to get to know your client, fiduciary duty to your Buyer, you need to guide them to do it and know about their special needs and help them, you guys are a two-person team for the clients

2017 Updates

New Changes:

  • License number must be visibly displayed everywhere, including signs & all communication (email/text) 
  • Water-Conserving Plumbing Fixture and Carbon Monoxide Detector Notice (WCMD) Required – do not use Carbon Monoxide Detector Notice (CMD) anymore
  • Booklets are required 
  • The way Broker Associates presented on the BRE website are being changed in the near future.

Business Cards & All Signs:

  • BRE Number must be the same size as the smallest font on the card and all social media
  • Must include United Real Estate company logo on all marketing collateral and maintain the same size

Required Bed Bug forms for leases:

  • Effective July 1st, residential landlords are required to insert language into leases advising about bedbugs.  
  • Required for new leases, but existing leases must be amended to include bed bug info.

Residential Lease Agreement:

  • Now references bed bugs and water sub-meters.
  • Landlords are now permitted to terminate a lease if the tenant has not made payments required before possession.

Cancellation of Lease Form:

  • This new form will allow for unilateral or mutual cancellation of a lease.  
  • There is a section for the return of rent and security deposit.

Pre-possession/ Notice to Pay:

  • Will serve as the notice to perform for a tenant who has not completed required payments before taking possession.

Summary of Offer:

  • Give main points from the selling agent

Summary of Multiple Offer Forms:

  • Give main points from the multiple offers from the Listing agent to the owner

Agency Law:

  • Considered Dual agency if the same brokerage, even if there are different agents
  • If under the same brokerage, you can talk to the buyer/seller and don’t have to ask the other agent
  • If two agents from the same brokerage are working a transaction (one on the buyer side and one on the seller side) both agents owe a fiduciary duty to both the seller and buyer. You can’t say you need to talk to your agent and you must answer their question.

Brokerage-Owned escrows:

  • Cannot give FIRPTA, but agents are also not recommended to do it either.  
  • C.A.R. FIRPTA Form has been redone to use a Qualified Substitute to document federal withholding.

Listing Agreements:

  • All listing agreements containing the arbitration clause have been modified and no longer exists.
  • If you wish to include the arbitration clause, copy and paste it onto an addendum and attach it to the listing agreement.

 Probate Purchase Agreement:

  • Language about applicability of liquidated damages for increased deposits has been removed

REO Advisory:

  • Now includes language concerning the need to comply with water conserving plumbing fixtures law.

Trust Advisory:

  • Now includes language concerning the need to comply with water conserving plumbing fixtures law.  
  • Also modified the explanation of when seller who is trustee has to provide a TDS.  
  • No more TAL (for listing)- Broker section has been added to the TA.
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